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Senate Republicans Unveil New Health Bill but Divisions Remain Senate Republicans Unveil New Health Bill, but Divisions Remain
(about 5 hours later)
WASHINGTON — Senate Republican leaders unveiled a fresh proposal to repeal and replace the Affordable Care Act, revising their bill to help hold down insurance costs for consumers while keeping a pair of taxes on high-income people that they had planned to eliminate. WASHINGTON — Senate Republican leaders on Thursday unveiled a fresh proposal to repeal and replace the Affordable Care Act, revising their bill to help hold down insurance costs for consumers while allowing insurers to sell new low-cost, stripped down policies.
But the measure was immediately imperiled when two Republican senators, moderate Susan Collins of Maine and conservative Rand Paul of Kentucky, announced they were not swayed — even on a procedural motion to take up the bill next week, a motion to proceed. Those changes and others, including a decision to keep a pair of taxes on high-income people and to expand the use of tax-favored health savings accounts, were intended to bridge a vast gap between the Senate’s most conservative Republicans, who want less regulation of health insurance, and moderate Republicans concerned about people who would be left uninsured.
One more defection would doom the bill and jeopardize the Republicans’ seven-year-old quest to dismantle the health law that is a pillar of President Barack Obama’s legacy. In a sign that more could follow, two other Republican senators, Lindsey Graham of South Carolina and Bill Cassidy of Louisiana, unveiled their own alternative plan, just minutes before Senate leaders offered their latest. But Republican leaders will have to battle for votes ahead of a final showdown they hope will come next week. Two Republican senators, Susan Collins of Maine, a moderate, and Rand Paul of Kentucky, a conservative, said they were not swayed — even on a procedural motion to take up the bill for debate.
Senator Shelley Moore Capito, Republican of West Virginia, expressed “serious concerns about the Medicaid provisions” in the latest draft, although she did not reject it. Several others, from both sides of the party’s ideological spectrum, expressed misgivings.
With the revised bill, the majority leader, Mitch McConnell, Republican of Kentucky, had hoped to win the 50 votes he needs to win Senate passage. But the changes may not have been enough to bridge the vast divide that has opened between the Senate’s most conservative Republicans, who had vowed to destroy the Affordable Care Act “root and branch,” and its moderate Republicans, who worry that deep cuts to Medicaid would leave too many in their states without health care. Senator Mike Lee, Republican of Utah and a strong conservative, said, “The new Senate health care bill is substantially different from the version released last month, and it is unclear to me whether it has improved.”
Republicans said the revised bill would provide roughly $70 billion in additional funds that states could use to help reduce premiums, hold down out-of-pocket costs and otherwise make health care more affordable. The bill already included more than $100 billion for such purposes. But more moderate members were upset by cuts to Medicaid, the health program for low-income people.
But the new bill, like earlier versions, would still convert Medicaid from an open-ended entitlement to a system of fixed payments to states. In the event of a public health emergency, state Medicaid spending in a particular part of a state would not be counted toward the spending limits, known as per capita caps, a concession to moderate Republicans but perhaps not enough to get the 50 votes needed for passage. Senator Shelley Moore Capito, Republican of West Virginia and a moderate voice, expressed “serious concerns about the Medicaid provisions” in the latest draft, and Senator Rob Portman, Republican of Ohio, expressed similar concern.
Overall, the new version of the bill made broad concessions to conservative Republicans who had maintained that the initial draft left too much of the Affordable Care Act in place. Mr. McConnell then backfilled the bill with money intended to placate moderates. That jury-rigging of the bill left neither side completely satisfied. “I want to make sure that with regard to those people who are currently getting coverage under Medicaid expansion, that we have some options for them,” Mr. Portman said.
For instance, in a departure from current law, the bill would allow insurers, under certain conditions, to offer health plans that did not comply with standards in the Affordable Care Act. Under that law, insurers sell regulated health plans through a public insurance exchange in each state. Two other Republican senators, Lindsey Graham of South Carolina and Bill Cassidy of Louisiana, went on television to promote their own alternative plan, just minutes before Senate leaders offered their latest.
But health care experts worried that such a change would send healthy consumers to low-cost, basic health plans, leaving sick and older consumers to buy more comprehensive health policies at much higher prices. To compensate, Republican leaders added billions of dollars to try to offset rising premiums. With 52 Republicans in the Senate, and two firm “no” votes already, a single new defection would doom the bill and jeopardize the Republicans’ seven-year quest to dismantle the health law that is a pillar of President Barack Obama’s legacy.
Senator Ted Cruz, Republican of Texas, had pushed to allow stripped-down plans, and he called the inclusion of the provision “very encouraging.” Democrats probed for weaknesses in the Republican ranks.
“I think failing to get this done would be really catastrophic,” Mr. Cruz said on the radio station KFYI, “and I don’t think any of the Republican senators want to see failure come out of this.” “The Republican Trumpcare bill still slashes Medicaid,” Senator Chuck Schumer of New York, the Democratic leader, said. “The cuts are every bit as draconian as they were in the previous version — a devastating blow to rural hospitals, to Americans in nursing homes, to those struggling with opioid addiction and so many more.”
But Senator Paul, an ardent conservative, remained implacably opposed. Another conservative, Senator Mike Lee of Utah, said he was undecided. If enacted, the bill would be a sharp departure from more than a half-century of efforts by Congress and presidents of both parties to expand health insurance coverage, through a patchwork of federal programs.
In another change, people who enroll in catastrophic health insurance plans would be eligible for federal tax credits to help pay premiums. Such plans typically have lower premiums and high deductibles. But under the Affordable Care Act, consumers generally cannot use the tax credits for such plans. Repealing the Affordable Care Act is a high priority for President Trump and House Republicans, who passed their own version of a repeal bill on May 4. Republicans say they are trying to stabilize insurance markets and rescue consumers who face sky-high premiums and deductibles on the Affordable Care Act’s exchanges.
The bill would, for the first time, allow people to use tax-favored health savings accounts to pay insurance premiums. Republicans said this policy change would increase health care coverage. But passing a bill is proving to be a huge challenge in the Senate, just as in the House, which struggled with its repeal measure. Over all, the new version of the Senate bill made broad concessions to conservative Republicans who had said that the initial draft left too much of the Affordable Care Act in place. Senator Mitch McConnell of Kentucky, the majority leader, then backfilled the bill with money intended to placate moderates.
The bill also provides $45 billion to help combat the opioid abuse crisis — a provision that is particularly important to two Republican senators who opposed the previous version of the bill, Rob Portman of Ohio and Shelley Moore Capito of West Virginia. The resulting mix left neither side completely satisfied.
The new draft bill would not include any changes from current law to the net investment income tax or the additional Medicare payroll tax paid by certain high-income people. Nor would it change the limits on the tax deductions that insurers can take for salaries and other remuneration paid to top executives. The revised bill, like the previous version, would roll back the expansion of Medicaid under the Affordable Care Act, and it would still convert Medicaid from an open-ended entitlement to a system of fixed payments to states. However, in the event of a public health emergency, the resulting surge in state Medicaid spending would not be counted toward the spending limits, known as per capita caps.
The Senate is, in effect, trying to catch up with the House, which on May 4 narrowly approved a bill to repeal and replace much of the Affordable Care Act. The revised bill would provide roughly $70 billion in additional funds that states could use to help reduce premiums and hold down out-of-pocket medical costs.
To succeed, Mr. McConnell must win over almost all the holdouts in his caucus, a daunting and delicate task given the litany of complaints he faces and the sharp policy differences that he must find a way to bridge. In a departure from current law, the bill would allow insurers, under certain conditions, to offer health plans that did not comply with standards in the Affordable Care Act. Under that law, insurers sell regulated health plans through a public insurance exchange in each state and must provide “essential health benefits,” such as maternity care, emergency services and mental health coverage.
But the revised bill is broadly similar to the earlier measure that Senate leaders hoped to vote on before the Fourth of July recess, though the new version includes some additional provisions meant to entice reluctant Republican senators with varying policy concerns. Under the Senate bill, if an insurer offered several plans on state exchanges that were subject to the Affordable Care Act mandates, it could also offer coverage outside the exchanges that would be exempt from most of those regulations.
“It appears that little has changed at the core of the bill,” the Senate Democratic leader, Chuck Schumer of New York, said on the Senate floor. “The Republican Trumpcare bill still slashes Medicaid. The cuts are every bit as draconian as they were in the previous version — a devastating blow to rural hospitals, to Americans in nursing homes, to those struggling with opioid addiction and so many more.” Insurance plans could escape from some of the most important consumer protections in the Affordable Care Act, such as prohibitions on discrimination based on a person’s health status, medical condition, claims experience, medical history or disability.
Like the previous bill, it would end the requirement that most Americans have health coverage, and it would make deep cuts to Medicaid, capping payments to states and rolling back its expansion under the Affordable Care Act. Though some Republican senators expressed concern about how the previous bill would affect Medicaid, Senate leaders stuck with the same approach in the new version. This part of Mr. McConnell’s bill, incorporating ideas from Senator Ted Cruz, Republican of Texas, was tacked onto the end of the bill and is enclosed in brackets. Aides to Senate Republicans said the brackets meant that the language was not final and could be revised in light of comments from other senators.
In a notable change, the bill would keep the two taxes imposed by the Affordable Care Act on people with high incomes: the 3.8 percent tax on investment income and the 0.9 percent payroll tax. The taxes apply to individuals with income over $200,000 and couples with income over $250,000. Mr. Cruz said the inclusion of this provision was “very significant progress,” and he called the revised bill a “substantial improvement.” But insurers and consumer advocates worried that the new provision would send healthy consumers to low-cost, basic health plans, leaving sick and older consumers to purchase more comprehensive health policies at much higher prices.
Both of those taxes would have been repealed under the previous Senate bill, reducing federal revenue by about $231 billion over a decade, according to the congressional Joint Committee on Taxation. To compensate, Republican leaders allocated tens of billions of dollars in their bill to try to offset rising premiums. Consumers could not use federal tax credits to help pay premiums for coverage that did not meet federal insurance standards.
Mr. McConnell is trying to avoid a repeat of his first attempt to push his bill through the chamber, when he was forced to delay a vote planned for late last month because of opposition from Republican senators. Senator Chris Coons, Democrat of Delaware, said the section of the bill based on Mr. Cruz’s proposal “would allow insurers to offer junk health insurance plans.”
During debate on the bill, senators are expected to propose numerous amendments on the Senate floor, some of which could modify provisions of the bill affecting Medicaid. “To me, that is like allowing car companies to sell cars without airbags, bumpers, or emergency brakes,” Mr. Coons said. “It might make the cars cheaper, but the cars are too dangerous to drive.”
Republicans expect that an analysis of the new bill will be released by the nonpartisan Congressional Budget Office early next week. The previous bill would have increased the number of people without health insurance by 22 million in 2026 compared with the Affordable Care Act, the budget office found. In another change, the bill would allow people to use tax-favored health savings accounts to pay insurance premiums. Republicans said this policy change would increase health care coverage.
Mr. McConnell has said he intends to take up the revised bill next week, although it is unclear if he would try to move ahead if he did not know for sure whether he had the votes to begin debate — or to ultimately pass the bill. The bill also provides $45 billion to help combat the opioid abuse crisis — a provision that was particularly important to two Republican senators who opposed the previous version of the bill, Mr. Portman and Ms. Capito.
In a notable change, the revised bill would keep two taxes imposed by the Affordable Care Act on people with high incomes: a 3.8 percent tax on investment income and a 0.9 percent payroll tax. The taxes apply to individuals with income over $200,000 and couples with income over $250,000. Those taxes would have been repealed under the previous Senate bill, reducing federal revenue by about $231 billion over a decade, according to the congressional Joint Committee on Taxation.
The updated bill would also retain limits on the tax deductions that insurers can take for compensation paid to top executives. The previous Senate bill would have removed those limits, imposed by the Affordable Care Act.
To succeed, Mr. McConnell must win over all the holdouts in his caucus, a daunting and delicate task given the litany of complaints he has faced and the sharp policy differences among Senate Republicans.
“This is our chance to bring about changes we’ve been talking about since Obamacare was forced on the American people,” Mr. McConnell said. “It’s our time to finally build a bridge away from Obamacare’s failures and deliver relief to those who need it.”
But Ms. Collins and some Democrats, such as Senator Mark Warner of Virginia, say it is time to recognize the flaws in the Affordable Care Act and try to find bipartisan solutions, without such far-reaching legislation.
Republicans expect that an analysis of the revised bill will be released by the nonpartisan Congressional Budget Office early next week. The previous version would have increased the number of people without health insurance by 22 million in 2026 compared with current law, the budget office found.
Mr. McConnell said he would then move to take up the bill for debate, amendments and a final vote — if he can get 50 willing senators.